Holcim asks suspension of merger with Lafarge

Holcim said on Monday the suspension of its merger with Lafarge, pressing the French company to renegotiate the terms of the agreement and jeopardizing the plan to create the largest cement manufacturer in the world.
Announced in April 2014, the agreement provided for combining companies on equal terms.
But since then, divergent results, stock prices and an appreciation of the Swiss franc against the euro reinforced the position of Holcim and took its largest shareholder to press publicly for a review of the agreement.
"The Board of Directors of Holcim concluded that the concentration agreement can no longer be sought in its current form," said Holcim, in a statement, completing that is ready to treat both the stock exchange ratio as "issues of governance".
Lafarge said in separate statement that was willing to consider a revision of the exchange ratio of shares, but not other aspects of the business, which was presented as a "merger of equals".
The Chairman of Lafarge, Bruno Lafont, would become Chief Executive of the merged company, but Holcim wants to change the previous plan, said a person familiar with the situation.
One of the top ten shareholders of company told Reuters that the composition of the Council was also a problem, since the original plan of dividing the seats equally with seven for each side was no longer fair.
Shareholders of both groups still have to ratify the agreement, and some of them on the side of the Holcim asked for changes, including the investor Thomas Schmidheiny, who holds a stake of 20 percent. (By Leila Abboud and Oliver Hirt)